The danger of major international conflict is growing as tensions rise between a US global empire in relative decline and a rapidly rising China. The situation poses huge challenges for Australian capitalism. The international order that has shaped the past 70 years is crumbling. As former Australian spy chief Allan Gyngell said in a speech last year to the Australian Institute of International Affairs, “It’s not being challenged. It’s not changing. It’s over”.

That order, ushered in by the victors of World War Two and the dropping of atomic bombs on Hiroshima and Nagasaki, should not be glorified. It brought the world to the brink of nuclear annihilation, left 7 million Koreans, Vietnamese and Cambodians slaughtered in wars for Western imperialism, ruthless US and Russian (and Australian) backed dictatorships on every continent and all sorts of violent oppression, often justified with Cold War propaganda.

The collapse of the Soviet Union in 1991 caused a period of unparalleled US global domination. From 2001, the US and its closest allies laid waste to Afghanistan and Iraq, hoping to reshape the Middle East and Central Asia to ensure a “New American Century” of global dominance against perceived threats, chiefly China. They failed.


The US now faces an imperialist challenge like never before. The Soviet Union was a rival, but it never threatened to supersede the US as the world’s dominant superpower. China is not there yet either, but its rise is different. In 1978, China made up just 1 percent of the world economy. Today it represents around 20 percent; is the second largest economy and on track to surpass the US in a decade. Long gone are the days when China was just the low-skilled sweatshop of the world. It is a technologically advanced economy, producing smart phones, super computers and advanced weapons systems.

A bigger economy means deeper pockets to fund an increasingly assertive foreign policy. It means greater clout in trade and diplomatic negotiations and more money for weapons. Chinese president Xi Jinping has torn up the small target policy of “hide and bide” and is now pushing ahead to expand China’s presence through Asia and even into parts of Africa, Europe and South America. China’s expansion can come only by stepping on the toes of the US and its allies, in areas they consider their own.

This tension is playing out in many spheres. The South China Sea, crucial to world and especially Chinese trade, is perhaps the clearest example. Its control is hotly contested. China took big strides toward securing its dominance by pushing ahead with plans to construct artificial islands and then militarise them, staring down the threats by the US and its allies.


The US has pursued a contradictory policy towards China for decades. US capitalism benefited greatly from the opening of the Chinese economy from the 1980s. Corporations took advantage of cheap labour and set up factories. Cheap consumer goods imports assisted in keeping wages in the West down. And as China ran a bigger trade surplus, it bought Treasury bonds, helping the US government maintain spending and pay for things such as tax cuts for the rich, a bloated military budget and the invasion of Iraq.

But this economic relationship also facilitated China’s rapid rise. The US has tried to push back for more than a decade. During the presidencies of George W. Bush and Barack Obama, the US tried a “pivot to Asia” to contain China, involving a diplomatic and trade offensive combined with a limited redeployment of US military power to East Asia, but was hampered by the continuing wars in the Middle East. By the end of Obama’s presidency, there was consensus among US foreign policy strategists, and both the Hillary Clinton and Donald Trump camps, that the US had to get tougher on China.

This is important to understand. Donald Trump’s aggressive and often incoherent outbursts on foreign policy are not just the ravings of an insecure madman. They also represent an insecure empire flailing around trying to remain number one. While there are debates on tactics going on in ruling circles, and Trump’s personal inadequacies are real enough, he is, broadly speaking, implementing the consensus approach of US imperialism to push back on all fronts. One indication of this is the unanimity of opinion in both the Republican and Democratic parties on this question, including every candidate for the Democratic presidential nomination. Indeed, Bernie Sanders recently chided Joe Biden for being too soft on China.

The rising imperialist tensions are not superficial but structural. They are not about personalities or particular politicians, and so will not end with the end of Trump’s presidency. The world’s two major powers are on a collision course that is reshaping international politics and the world economy. As FBI director Christopher Wray stated recently, “One of the things we’re trying to do is view the China threat as not just a whole-of-government threat, but a whole-of-society threat ... and I think it’s going to take a whole-of-society response by us”.

This helps to make sense of Trump’s economic nationalist trade policies, despite the damage they are doing to the plans and profits of some US corporations. Trump is simultaneously trying to leverage a better deal for US corporations doing business in China, restrict China’s ability to invest abroad, especially in high-tech companies or strategic infrastructure, and force US businesses to carry out more of their activities on US soil. If at some point a war with China becomes reality, the US wants an industrial and technological base it can rely on to wage that war. And it wants its allies to follow, hence the pressure the US is exerting to prevent telecommunication company Huawei’s further penetration into Europe, China’s buying up of tech companies and the immense “Belt and Road” infrastructure projects designed to project China’s power westward.

But the US has no simple solutions, as the escalating situation with Iran demonstrates. Trump’s aggressive moves to weaken Iran, tearing up the 2015 nuclear agreement and imposing crippling sanctions, risk pushing Iran closer into the arms of China and Russia, which are already strengthening economic and military ties.

On the military front, US spending has increased for five consecutive years, again with bipartisan support. It now stands at nearly US$650 billion, more than the next seven countries combined. Military bases are being beefed up in Asia. Two and a half thousand US troops are now based in Darwin, and plans have emerged for $300 million to be spent by the US building more military and naval facilities there. And the US is pressuring its allies to increase their military spending. An arms race is under way in the Asia-Pacific – a 52 percent increase in military spending in the last decade. China is expanding its military spending by 7-8 percent per year, modernising its forces and expanding its navy to contest US power in the region.


The situation poses enormous challenges to Australian capitalism, which is also boosting military spending, to $38.7 billion. Australia is the major imperialist power in the South Pacific. It has long bullied and bribed its way to dominance over its poorer neighbours, cultivating friendly governments while helping to oppress their people. But the three pillars of Australian imperialist strategy are being challenged by China’s rise and the changed world order. Allan Gyngell lays out how these pillars function:

“First, by establishing a close alliance with a more powerful external partner, first Britain then the United States. The countries Menzies famously called our ‘great and powerful friends’.

“Secondly, by working to shape the region of the world closest to us in Asia and the Southwest Pacific in ways that made it more conducive to our interests.

“And finally by recognising that, as a country big enough to have global interests but too small to be able to advance them by throwing our weight around, Australia is best served by a world in which the rules, whether of trade, maritime law or arms control, are clear and which we have played a part in setting.”

Given Australia’s reliance on the US alliance, any weakening of the US on the world stage is bad for Australian imperialism. If, as seems likely, the US mounts a stubborn effort to contain China, then the threat of military conflict escalates. Any conflict would inevitably result in Australia lining up with the US, would massively destabilise the region, block Australia’s trade routes and threaten the lives of millions of people.

Australia’s key imperialist ally and its main trading partner are becoming increasingly hostile. Some have speculated that Australia could realign toward China. This will not happen. Australia and the US are far more integrated states and societies, with decades of a close alliance, than either is with China.

We should not be surprised that Australia is so willing to line up against its biggest trading partner. Capitalist states often conduct extensive trade with their rivals right up to the outbreak of war, as occurred in the lead-up to the First World War. The US and China are today each other’s largest trading partners, yet both view the other as their main rival. Capitalism is above all about competition, even more than it is about short term profits.

Australia is not leaving everything to the US, and is also trying to push back against China’s growing influence. This doesn’t mean Australia is about to cut economic ties, which would be disastrous for Australian capitalism. All of Australia’s major exports to China continue to expand, from coal, iron ore and gas to financial services, education and tourism.

This doesn’t mean it’s all smooth sailing on the economic front, though. Like the US, Australia is increasingly intervening to prevent particular Chinese investments or projects deemed strategically threatening. Projects have been denied on “national security” grounds, including the sale of Ausgrid, another 15,000km of gas pipeline and some security infrastructure. Huawei has been excluded from the roll-out of Australia’s 5G network.

Australia is worried about the growing tariffs and trade war between the US and China, and the potential for shipping lanes to become increasingly contested with the breakdown of the current “rules-based order”. This order until now has rested on the US playing the role of world cop and the unwillingness of any power to challenge this status quo.

In the South Pacific, Australia has been spurred to step up its intervention since it was rumoured that China might build a naval base in Vanuatu. As Scott Morrison put it, with typical colonial arrogance, “This is our patch, this is our part of the world”. The government is now pledging a $2 billion increase to the paltry “aid” budget, while barely concealing the real motive of containing China’s influence. Australia has pushed hard to stop Huawei building a new internet cable to Papua New Guinea, and is set to establish a new naval base with the US on Manus island.


What all this means for Australian politics is a ramping up of anti-Chinese hysteria and racism, led by all major parties, various think tanks and the media. In language reminiscent of the Cold War, the Chinese, we are told, are interfering in Australia’s democracy, spying on us and taking our land, jobs, houses and even baby formula.

The ABC has led the charge, with seemingly every second episode of Four Corners now devoted to another story of how the Chinese are taking over. Greens member and intellectual Clive Hamilton has recently written a book, Silent Invasion. The title tells you everything you need to know about it. It is a reminder that when “the nation” is threatened by a rival imperialism, liberal politics is found wanting.

The need to build an internationalist, anti-imperialist and anti-racist approach in the coming years will grow. We have seen, since the “war on terror” was launched in 2001, the depths of racism conjured up against Muslims, in the name of national security. That is in a period when Australian imperialism faced no threat. Any coming conflict with China will see the ruling class go into overdrive to make us fear and hate China, the Chinese people and the 1.2 million people of Chinese descent living in Australia, just as much as the population was urged to hate the Germans and Japanese during previous imperialist wars.

The anti-Chinese hysteria is sheer hypocrisy. The US (with a small but significant contribution from its Australian partner) out-spends China on spy programs, cyber warfare, interference in foreign politics and so on. In terms of “foreign interference” in Australia, the US, not China, exerts far greater influence. More to the point, the Australian ruling class is primarily responsible for the inequality, stagnant wages, lack of affordable housing and oligarchic political system.

In coming years, the politicians and media will try to paint China as the aggressor – an expansionist power upending the current “rules-based order” – just as they did with Germany and Japan in the First and Second World Wars. But remember that the current “order”, just as then, is one of imperialist domination, a result of the bloodthirsty aggression of the US and Australia in dominating the world and this region at the expense of any real democratic say of the people.

The working class of Australia has nothing to gain and everything to lose from conflict with China. The same goes for the working classes of China, the US and all the other nations who could be caught in the crossfire. It’s up to us to oppose our own governments in their drive to increase military spending, nationalism and racism as they prepare for the next war.